Risk for Reward

Mihailo “Mike” Temali is many things: the proud son of Danish and Yugoslav immigrants, founding CEO of the Neighborhood Development Center (NDC), Eagle Scout, husband, father and dyed-in-the-wool St. Paul East Sider. Just don’t credit him as the mind behind Midtown Global Market, a multicultural food destination in south Minneapolis.

“This wasn’t my idea,” Temali insists with a smile, surveying the market’s exuberant mix of diverse families, couples and Abbott Northwestern Hospital medical staff in mint-green scrubs. Lunch options surrounding them include tamales from La Loma, East African camel burgers from Safari Express and turmeric-scented tikka masala from Hot Indian Foods. Inspired by public markets like Seattle’s Pike Place and Philadelphia’s Reading Terminal Market, the team that developed the blueprint for Midtown Global Market as a community business incubator built upon the momentum of NDC’s earlier flagship project, Mercado Central.

Investing in Low-Income Neighborhoods

Temali, a 1998 Bush Fellow, has spent his entire career investing in entrepreneurs and small businesses as catalysts to transform low-income neighborhoods. In the early 2000s, NDC and other partners joined with the City of Minneapolis to transform the abandoned Sears Roebuck building in south Minneapolis into a neighborhood hub with office, residential, commercial and community uses. In 2006, the $190 million Midtown Exchange project, including Midtown Global Market, was complete. The project Temali calls “an insane risk” paid off, and remains a welcoming international signifier of Minneapolis’ 21st century urban renaissance.

That’s not by accident. NDC, whose mission encompasses community development, community organizing and microfinance, endeavors to harness “the personality of the business owner and the personality of the neighborhood,” Temali says. New entrepreneurs receive technical assistance, legal help, marketing consultation and business training classes in five languages: Spanish, English, Hmong, Somali and Oromo. With these resources, they can make the most of the loans the NDC offers — a total of nearly $25 million to date.

A stroll through the Market reveals the power of building strong relationships for growing a business. Taco Cat’s chefs, Intown Sushi proprietor Than Zaw and chief maintenance engineer Melissa Marcelle all greet Temali. Marcelle, a Native American entrepreneur, participated in NDC’s business training sessions before launching The Greenery, a plant shop. 

“We’ve trained close to 6,000 low-to-very-low-income people to start a business,” Temali marvels. Close to 90% of these aspiring business owners are people of color. Since its inception, NDC’s training has led to the launch of more than 1,000 small businesses, about half still open, and the creation of more than 5,000 jobs, according to Wilder Research estimates. Well more than half of these businesses employ neighborhood residents, hire people of color and occupy formerly vacant buildings. NDC’s free classes don’t sugarcoat the challenges of entrepreneurship, and the training leads some to get out before getting started. As for businesses that launch and crash, Temali maintains that NDC’s role is partner, not parent.

“When these things blow up, which they do,” he muses, “we have pretty deep insight into what went wrong. But we are not the driver.”

East Side Kid

It’s an old question: Are leaders born or made? 

Mike Temali’s Yugoslavian attorney father and Danish social worker mother met in a World War II displaced persons camp and eventually emigrated to Youngstown, Ohio. Between them, Temali’s parents spoke seven or eight languages — but English was initially foreign to his father. His father’s inability to communicate, Temali recounts, created a son with empathy for immigrants who, despite their skills and knowledge, were often consigned to low-wage work and discrimination due to language barriers in the U.S. “We dismiss them even though they might have a Ph.D. or be a judge in their home country,” he says.

In the mid-1950s, the family settled in the Dayton’s Bluff area of St. Paul. Temali describes the East Side of the 1960s as “white, blue collar and dominated by three employers: Hamms, 3M and Whirlpool — all companies that have since left the neighborhood.”

In his 2002 book, “The Community Economic Development Handbook,” Temali describes two neighborhoods: in the first, litter swirls around boarded-up storefronts and residents lucky enough to be employed work elsewhere. The other neighborhood is well-maintained and buzzing with economic and cultural activity. Temali writes, “Imagine that these two neighborhoods are actually the same neighborhood, 5 or 10 years apart in time.”

Temali witnessed the rapid decline of Dayton’s Bluff when the construction of Interstate 94 flattened whole city blocks of St. Paul’s East Side. People left the neighborhood, and by the Internet age, the mom-and-pop businesses succumbed to gentrification.

“We no longer have neighborhood churches, schools or diners — so what you have is isolation,” he says. “NDC spends a lot of our work rebuilding community gathering places.”

A Lightbulb Moment

In 1990, St. Paul’s Western Bank — then a local family-run institution in Frogtown — hired Temali to extend the reach of its community impact. In those days, Temali was running a two-person office for North End Area Revitalization (NEAR), which focused on supporting local businesses in the Rice Street commercial district.

Temali convinced Western Bank chairman Bill Sands to join him on an impromptu fact-finding trip to Chicago, where the South Shore Bank had become a game-changing economic force on the impoverished South Side. Not long after the trip, Temali experienced what Sands calls a lightbulb moment: “What if we tapped into neighborhood residents’ skills and talents and asked them if they might be interested in training and technical assistance to either create or expand a business? NDC took off from there.”

An early focus was to help the Latinx community, many of whom were monolingual Spanish speakers, to kickstart businesses. By the mid-1990s, several graduates of the NDC business course envisioned an exciting idea: a mercado, or Mexican-style market, with local entrepreneurs selling food, clothing and household wares. In 1999, Mercado Central launched on Lake Street. Two decades later, the project has come full circle: NDC sold the building for $1 to the cooperative of tenants, making Mercado Central truly community owned.

Build Community from Within

Later, trips to Peru, Bolivia, Indonesia and Thailand in the early ’90s were research in the emerging practice of microfinance for community development. In 1998, Temali took a leave of absence from NDC for a Bush Fellowship. He studied microlending and community development in Santiago, Chile. “Those lessons learned abroad during the Bush Fellowship,” he says, “became completely integrated at the NDC, creating a more powerful and confident base.”

What works in Santiago, he found, may not work in Minneapolis. “The amount of work it takes to go from the informal economy to the formal economy in a society like ours is significantly more,” he says. “A loan isn’t enough. You need training and technical assistance.”

Yet, he warns, “There’s a balancing act between overseeing entrepreneurship and scaring the hell out of people.”

Closing Opportunity Gaps

Also during his Fellowship, Temali gained more perspective on microlending during six months of economics and finance study at Harvard and MIT. While in Massachusetts, he audited lectures with “rock-star professors” teaching students how to scale and how to bring in other people’s money. His time included internships at the Initiative for a Competitive Inner City and global financial nonprofit ACCION USA.

One MIT professor was incredulous when Temali explained NDC’s work: “‘Let me get this straight,’ he told me, ‘You work with low-income people with bad credit and no money to start businesses that they’ve never run before, in tough low-income neighborhoods? You are brilliant at selecting for failure.’”

Where his professor saw failure, Temali saw potential. “Mike taught me that when you have an area with high deficiency or disparity, you have to create high opportunity,” says Mike Goze, CEO of American Indian Community Development Corporation (AICDC) and an NDC board member. “He has taken on a tremendous role in the development of underserved and newer immigrant populations — Hmong, Latino, Native, Somali and East African — who have all been helped by NDC.”

The motivation behind working with underserved entrepreneurs is not merely economic, but philosophical. “Success is not measured by turning a boutique business into a corporation,” Temali insists. “One of our goals is to get a whole lot of people of color on the ladder, and most haven’t had that chance. We get 95-98% of our loans paid back. The numbers speak for themselves.”

In the case of Hot Indian Foods, NDC mentorship and loans helped a popular food truck business expand to four brick-and-mortar locations, including Midtown Global Market and Target Field. Another NDC-trained success story is Los Ocampo, a taqueria chain with more than 150 employees. “If I have a problem, Mike gives me a solution — or he gives me the number of someone who might have the solution,” says founder Armando Ocampo.

Until recently, Temali still faced occasional pushback from national funders and legislators who believed that NDC only helps mom-and-pop businesses. But the COVID-19 shutdown changed the narrative. “For the first time in my career, there is a national realization of what communities are like with small and micro businesses shuttered,” he says. “Fifty percent of America works for these businesses, and suddenly they’re unemployed and not paying rent while they’re closed. Visually, our neighborhoods’ commercial corridors look like a ghost town. It’s where people get their daily experiences and needs met, whether it’s getting their haircut, a lunch, a morning coffee or an evening workout. Small and micro businesses have the nation’s attention, one level below the health workers in terms of priorities.”

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